Specific Types of Representation · Representing a taxpayer in the collection process

Collection due process: lien and levy hearings

Collection due process is the taxpayer’s one statutory opportunity to have an independent officer look at a lien or a proposed levy before collection proceeds — and, uniquely among collection appeals, to take the result to the Tax Court. The deadlines are short and unforgiving, and the difference between meeting one and missing it is the difference between judicial review and none.

The rule

Levy. No levy may be made unless the Secretary has first notified the person in writing of the right to a hearing (IRC § 6330(a)(1)). The notice must be given in person, left at the dwelling or usual place of business, or sent by certified or registered mail with return receipt requested to the last known address, not less than 30 days before the first levy for that period. Only one such notice is required for the taxable period.

Lien. After filing a notice of federal tax lien, the Secretary must notify the person not more than five business days after the filing (IRC § 6320(a)(1), (2)). The right to request a hearing runs during the 30-day period beginning the day after that five-business-day period ends (IRC § 6320(a)(3)(B)).

The hearing. A written request stating the grounds produces a hearing before the IRS Independent Office of Appeals (IRC § 6330(b)(1)), conducted by an impartial officer, and the taxpayer is entitled to only one hearing for the taxable period (§ 6330(b)(2), (3)).

What may be raised. Any relevant issue relating to the unpaid tax or the proposed levy, expressly including appropriate spousal defenses, challenges to the appropriateness of collection actions, and offers of collection alternatives — a bond, substitution of other assets, an installment agreement, or an offer in compromise (IRC § 6330(c)(2)(A)). The underlying liability may be challenged only if the person did not receive a statutory notice of deficiency and did not otherwise have an opportunity to dispute it (§ 6330(c)(2)(B)).

Judicial review. Within 30 days of a determination, the person may petition the Tax Court, which has jurisdiction over the matter (IRC § 6330(d)(1)).

Suspension. The levy actions at issue and the periods of limitation under §§ 6502, 6531, and 6532 are suspended while the hearing and any appeals are pending, and no such period may expire before the 90th day after the final determination (IRC § 6330(e)(1)).

How it works in practice

The request is made on Form 12153, and the date is everything. A request filed within the statutory window produces a CDP hearing with Tax Court review at the end of it. A request filed late may still produce an equivalent hearing — the same Appeals officer, largely the same conversation — but no determination that the Tax Court can review, and without the suspension the statute attaches to a timely request.

The equivalent hearing has a deadline of its own: one year — for a lien, commencing the day after the end of the five-business-day period following the NFTL filing; for a levy, commencing the day after the date of the CDP notice^TY2026 (Reg. § 301.6320-1(i)(2) A-I7; Reg. § 301.6330-1(i)(2) A-I7). The two are deliberately different, and the regulations say so — the lien period is measured from the end of the five-business-day notice window, the levy period from the date of the notice itself. Appeals issues a decision letter rather than a notice of determination at the end of it (Reg. § 301.6330-1(i)(1)).

Because only one hearing is available per period, the grounds stated in the request matter. Appeals considers the verification that legal and administrative requirements were met, the issues the taxpayer raised, and whether the action balances efficient collection against the intrusiveness of the action. A representative who requests the hearing without stating collection alternatives, and without the financial information to support one, has spent the opportunity.

The liability bar in § 6330(c)(2)(B) is where cases are lost. If a notice of deficiency was received, or the taxpayer otherwise had a chance to dispute the liability, CDP is about how the IRS collects, not whether the tax is owed.

How this has changed

Sections 6320 and 6330 were created by the IRS Restructuring and Reform Act of 1998 and applied to collection actions from January 1999; before that there was no statutory right to an independent hearing before levy or after a lien filing, and no judicial review of collection conduct. The most significant later change was jurisdictional: appeals from CDP determinations were once split between the Tax Court and the district courts depending on the underlying tax, and the Pension Protection Act of 2006 consolidated review in the Tax Court for determinations made after mid-October 2006, which is why § 6330(d)(1) now reads as a single route. Older material describing a district court alternative is out of date.

Exam focus

Learn the two timelines precisely: 30 days before the first levy for a levy notice, and for a lien, five business days to notify followed by a 30-day request window starting the day after. Know that the hearing is before the Independent Office of Appeals, that there is one per period, and that the underlying liability may be raised only where no notice of deficiency was received and no other opportunity existed. The 30-day Tax Court petition period after a determination is heavily tested, as is the CDP-versus-equivalent-hearing distinction.

Check yourself

1. A notice of federal tax lien is filed on 1 June. The taxpayer’s 30-day period to request a CDP hearing begins: (A) 1 June (B) The day after the five-business-day notification period ends (C) When the taxpayer actually receives the notice (D) 30 days after filing Answer: B. IRC § 6320(a)(3)(B).

2. Which may a taxpayer NOT raise at a CDP hearing where a notice of deficiency was received and not petitioned? (A) An offer in compromise as a collection alternative (B) A spousal defence (C) The existence or amount of the underlying liability (D) Whether the levy is appropriate Answer: C. Section 6330(c)(2)(B) bars it once there has been an opportunity to dispute.

3. Following a CDP determination, the taxpayer may petition the Tax Court within: (A) 90 days (B) 30 days (C) 60 days (D) Six months Answer: B. IRC § 6330(d)(1).

4. A request for a CDP hearing filed after the statutory period generally results in: (A) No hearing at all (B) An equivalent hearing, with no determination reviewable by the Tax Court (C) A CDP hearing, if good cause is shown (D) An automatic referral to the Collection Appeals Program Answer: B. The taxpayer keeps the conversation and loses the judicial review and the statutory suspension.